If you’re planning to set up your home as a rental property against selling on the real estate market, you’re not alone. There are approximately 2.25 million landlords in Australia, majority of whom are small landlords. Thus, if you’re thinking about setting up your house as a rental property, you’re joining a massive group of small landlords.
Before setting up your first rental property Cairns, ensure that you’re primed for success.
Set up a network
Before taking the plunge, it would be wise to reach out to experienced landlords, especially in your state, for recommendations and guidance. Depending on the area you live, you can physically visit landlord associations or networking events to get valuable feedback or advice related to becoming a first-time landlord.
If you don’t have many in-person options available, there are a hoard of online options for people looking for advice, such as BiggerPockets. In addition, you can and should create a professional LinkedIn profile if you’re yet to do and connect with landlords on that social networking site.
Know the law of the land (exactly and clearly)
Seriously, setting up your first rental property Cairns comes with plenty of legal tape to push through, and it’s crucial that you comprehend your responsibilities, accountabilities, & liabilities. Always probe from a local to a federal level. While you may find many resources online, be careful about verifying sources. In the initial stage, while you’re learning the ropes, it would be prudent to connect with a legal professional who can provide you with a wealth of information from a trustworthy source.
Figure out the financial risks
While a lot of people become landlords to earn passive income, financially, it’s crucial to understand the investment you’re making. For example, when aiming to set up your home as a rental property, thoroughly analyze how much you can reasonably rent the property for. When checking up on your budget, account for insurance costs, estimated maintenance costs, pest control prevention, or any other basic landlord-related expenses.
Know the real estate market
Knowing the market is necessary for succeeding in real estate investing. Pinpoint markets on a large scale, for example a specific city like Cairns with massive demand and growth. Along with markets on a smaller scale, for example zip codes or areas with opportunities for your rental property type.
Don’t decide to buy an investment property just because it’s cheap. Low-value real estate is often priced in accordance with its worth. It may be a high-crime locality or a low-demand district. If you stumble on a low-cost real estate market, be thoroughly informed and determine the variables that are causing the lower purchase price.
Summing Up
Rental income can be earned through various rental property investments. Ascertain whether you want to make a short-term investment (which can be sold quickly) or a long- term investment (which would become liquid over a longer time period). If you choose to pay attention to short-term ventures, consider being a wholesaler for fixed and flipped properties which you may upgrade and sell for a quick, but small profit. Anytime an investor assesses a property’s market value and repair costs, they hire a third party to serve as the “flipper” to make renovations and profit.
